Edward Leigh MP, Chairman of the Committee of Public Accounts, today said:
“Any organisation awarding grants should know the cost of administering each of its individual grant programmes and how that cost compares with others. Unfortunately, the nine principal grant-makers sponsored by the DCMS, who collectively awarded grants amounting to some £1.8 billion in 2006-07, spending a very hefty looking £200 million in the process, have little idea.
"Grant-makers are not required by the Department to report their costs against a common set of measures. The DCMS has also done little to encourage them to compare the costs of their grant programmes. This makes it all the harder to identify inefficient and wasteful practices.
"There are substantial differences across the sector in the cost of grant-making, even though administrative processes tend to be similar. This shows that grant-makers must do a lot more to share information and learn from each other, so that administrative costs can be driven down. So far they have been conspicuously unwilling to work together or to contemplate sharing services, systems or office accommodation. Taxpayers will share this Committee’s impatience that progress in this area has been so slow.
"In the United States, government grant-making agencies share a website for grant applications. The DCMS should encourage its own grant-makers to think also how they might collectively make use of such technology.”
Mr Leigh was speaking as the Committee published its 49th Report of this Session which, on the basis of evidence from the Department for Culture, Media and Sport (the Department), Arts Council England, Big Lottery Fund, English Heritage and Sport England, examined: assessing the cost-efficiency of making grants; supporting grant applicants; sharing services and information; and making applications on-line.
In 2006-07, the nine principal grant-makers sponsored by the Department awarded grants of some £1.8 billion, and spent some £200 million on administering the grants and related activities. The grants supported a range of projects from the work of individual artists such as choreographers and novelists, to the repair of places of worships and the building of new sports facilities. The grants ranged in size from £200 to many millions of pounds. Although grant-making is a key function for many of these bodies, they held little information on the costs of their individual grant programmes and how these costs compare with others.
The average cost of awarding £1 of grant across a sample of open application programmes in the sector ranged from three pence to 35 pence. Much of the variance in cost can be explained by the different objectives of the programmes and the needs of applicants. For example, the Arts Council offers significant support to artists to help them develop their potential and English Heritage provides specialist support to congregations repairing places of worship. Most of the grant programmes, however, have similar administrative processes.
Grant applicants can spend significant time on preparing grant applications, and grant-makers often receive applications which are incomplete or inaccurate. One way grant-makers could reduce the burden on grant applicants would be through inviting applications on-line. This would also help reduce the costs to grant-makers by reducing the amount of paper applications they have to process and the number of incomplete and ineligible applications.
Grant-makers are seeking to improve their processes in different ways, such as through centralising regional processes or by introducing new technology. However, they are doing so individually and have done little to work together to share back office functions. In the past, we recommended that the Department should take the lead in identifying the scope for savings by encouraging the organisations it funds to share accommodation and services. Little progress appears to be have made in this area. The Department has also done little to encourage benchmarking and the sharing of good practice across the sector.